March 18th, 2015 1:55 PM by Dale DiGennaro
Mortgage Backed Securities (MBS) are up +26/32 (FNMA 30-yr 3.0 at 102.06), around 21/32 above morning levels, and near the high for the day. Favorable repricing took place with most of our lenders! Bond-friendly comments from the Fed (see below)caused a big rally in MBS prices. No economic data was released today. The Dow is up 225 points. Tomorrow, Jobless Claims, Philly Fed, and Leading Indicators will be released so stay tuned.....we will post it here. As expected by most investors, the Fed statement dropped the word “patient†. This provides the Fed with the flexibility to raise the federal funds rate any time beginning in June. The biggest surprise was that Fed officials also increased the requirements to raise rates. According to the statement, Fed officials want to see further improvement in the labor market and want more confidence that inflation will reach their target rate of 2.0% before raising rates Adding to the time to meet the requirements, Fed officials lowered their forecasts for economic growth and inflation. Investors pushed expectations for rate hikes farther into the future.